Data & Research April 4, 2023

Adviser Satisfaction Dips Amid Big Market Drop

In 2022, investor satisfaction with full-service investment advisers fell 17 points on a 1,000-point scale. 

Reported by

Investor satisfaction with full-service investment advisers fell by 1.7 percentage points in 2022 from 2021, according to the J.D. Power 2023 U.S. Full-Service Investor Satisfaction Study.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

In 2022, the S&P 500 finished down nearly 20%, the worst year for Wall Street since 2008. The correlation between market performance and investor satisfaction poses a real challenge to the wealth management industry, said Tom Rieman, head of wealth solutions at J.D. Power.

“Adviser satisfaction continues to track overall market performance, and this points to a systemic problem in our industry: adviser value propositions grounded in investment performance,” said Rieman in a statement. “Advisers cannot control the ebbs and flows of the market, but the good ones help their clients plan for their best futures and deliver value in the form of comprehensive advice that should shine through in all market conditions.”

Overall investor satisfaction with full-service investment advisers in 2022 was 727 on a 1,000-point scale, down 17 points (2.3% of the previous total) from the year before. The figure was at 850 in 2020 and 776 in 2008. Adviser satisfaction tracking market performance indicates few advisers are delivering on their core value proposition, according to J.D. Power experts.

Currently only 11% of advisers offer comprehensive advice, namely personalized guidance on all financial and wealth management needs. In contrast, 42% of advisers deliver transactional advice, and 47% offer goals-based advice.

Among the 57% of full-service wealth management clients who reported having a financial plan, only 56% said they received comprehensive advice. Furthermore, only 32% of people expressed that their adviser made recommendations in their best interest. Twenty-nine percent of respondents did not feel that their adviser understood their financial goals.

Millennials and those in Generation Z were most likely to switch firms in the next 12 months and were most likely to work with a secondary investment firm, according to the study. Of these younger investors, 27% stated they “definitely will” or “probably will” switch firms, while 49% said they are working with a secondary investment firm.

J.D. Power found that in overall investor satisfaction, Charles Schwab ranked highest with a score of 752, followed by UBS at 741 and Fidelity with 740.

Conducted from October 2022 through January 2023, the study drew responses from 6,168 investors who work directly with a dedicated financial adviser or team of advisers.

Compliance April 3, 2023

Coca-Cola Settles ERISA Lawsuit Against MEP

The plan has agreed to a $3.3 million settlement for a complaint alleging it failed to drop an overpriced fund.

Reported by


The Coca-Cola Bottlers’ Association has agreed to settle for $3.3 million a claim brought against it by a former employee under the Employee Retirement Income Security Act in the U.S. District Court for the District of Kansas. The court has yet to approve the proposed settlement in the case, Kimario Anderson v. Coca-Cola Bottlers’ Association.

The multiple employer plan sponsored by the association is composed of 65 independent bottlers for Coca-Cola. As of 2021, it had approximately $973 million in assets under management. The initial complaint, brought in February 2021, alleged that the association had paid overpriced management and recordkeeping fees and had kept an undiversified Coca-Cola Common Stock Fund in its investment menu.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

In March 2022, the majority of this claim was dismissed. The court ruled that the plaintiff could not challenge the Coca-Cola Common Stock Fund because he had not invested in it personally and the complaint that it was undiversified made it discrete from other allegations of high fees. That resulted in the plaintiff’s ineligibility to challenge it on the grounds that it was part of a broader flawed process of negotiating fees. The court also dismissed the allegation of excessive recordkeeping fees because the plaintiff did not discuss the services that the recordkeeper, Wells Fargo, had provided in its analysis of the cost.

However, the court did rule that the claim against the association for maintaining a T. Rowe Price mutual fund called the Equity Index 500 Fund, which the plaintiff alleged charged fees grossly higher than funds with similar composition, could proceed. The court upheld this in part because the plaintiff identified instances of the plan dropping overpriced funds in the past, but not this one, which is a sign of an incomplete or flawed process under ERISA and therefore more than a mere sampling of better alternatives.

On March 23, the association filed a brief in support of a settlement for $3.3 million, which will be put into a fund accessible to other, as yet undeclared, members of the class. Other expenses, such as attorneys’ fees, will be subtracted from this amount, leaving the remainder for class members. The plan also retained Gallagher Fiduciary Advisors to review the settlement.

The proposed and agreed settlement must still be approved by the court before being finalized.

«